Financial Post, Jason Kirby, 14 July 2005
Somewhere in the New England region served by TD Banknorth Group, one of cchief executive Bill Ryan's employees is cruising the streets in a red-hot Corvette -- a reward for being the company's top-selling employee.
And after scooping up New Jersey-based Hudson United Bancorp. on Tuesday for US$1.9-billion, Mr. Ryan intends to give his new employees the chance to also get behind the wheel in an incentive program as unique as TD Banknorth's boss.
"I don't know how I'm going to do this, but it will certainly be done," Mr. Ryan said in an interview after announcing the deal. "These are the kinds of incentives other banks don't do."
Listening in on the call was Ed Clark, chief executive of Toronto-Dominion Bank, the largest shareholder of TD Banknorth. And his silence -- even as Mr. Ryan breezily chatted about handing out a US$50,000 sportscar while injecting millions to spruce up Hudson United's neglected branches -- indicated Mr. Clark plans to stick to his hands-off strategy for U.S. expansion. TD's foray into the United States is more of a case study of how to grow in that country than a cautionary tale of how not to fail.
To some onlookers, Mr. Clark might have had reason to object to TD Banknorth's purchase of Hudson United when Mr. Ryan brought the idea to him. Hudson United has operated under a cease and desist order related to the money-laundering activities of a division it acquired three years ago. This May, the bank settled with Internal Revenue Service in an investigation dating back to 1998. The bank also has been a dud when it comes to growth.
But the move would solidify TD's position in an affluent region. And if Mr. Ryan is correct, Hudson United can be reinvigorated by introducing a new product line and injecting a more entrepreneurial culture.
In return for granting Mr. Ryan the freedom to fulfill his acquisition goals, Mr. Clark has tapped decades of shoulder rubbing the TD Banknorth executive has done with other regional banks. Mr. Clark says he had considered Hudson United when he was looking for a bank to acquire in New England. Mr. Ryan, though, is far more familiar with Hudson United, having talked with Kenneth Neilson, its CEO, for more than a decade about doing a deal. Finally, with TD's help, he had the capital to follow through.
While the story about Mr. Ryan and the Corvette is flashy, other Canadian banking operations in the United States also offer incentives. Both Bank of Montreal and Royal Bank of Canada retail employees are offered a range of things from cold hard cash to four-day holiday trips. Where their U.S. strategies have hit a snag, though, is in the inability to resist tinkering with their acquisitions, especially RBC which tried to micro-manage Centura.
WIth all of Mr. Clark's recent activity in the United States, other Canadian bankers are no doubt watching TD's progress closely. People who spoke with John Hunkin, the former Canadian Imperial Bank of Commerce chief executive, when he left the job at the end of June, say he has openly admired Mr. Clark's U.S. strategy.
"Hunkin has a lot of respect for what TD's trying to pull off," said one source who spoke with him. "He was quite intrigued by what they are doing. It was like he was saying, 'Gee, we should have done that.' "
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Somewhere in the New England region served by TD Banknorth Group, one of cchief executive Bill Ryan's employees is cruising the streets in a red-hot Corvette -- a reward for being the company's top-selling employee.
And after scooping up New Jersey-based Hudson United Bancorp. on Tuesday for US$1.9-billion, Mr. Ryan intends to give his new employees the chance to also get behind the wheel in an incentive program as unique as TD Banknorth's boss.
"I don't know how I'm going to do this, but it will certainly be done," Mr. Ryan said in an interview after announcing the deal. "These are the kinds of incentives other banks don't do."
Listening in on the call was Ed Clark, chief executive of Toronto-Dominion Bank, the largest shareholder of TD Banknorth. And his silence -- even as Mr. Ryan breezily chatted about handing out a US$50,000 sportscar while injecting millions to spruce up Hudson United's neglected branches -- indicated Mr. Clark plans to stick to his hands-off strategy for U.S. expansion. TD's foray into the United States is more of a case study of how to grow in that country than a cautionary tale of how not to fail.
To some onlookers, Mr. Clark might have had reason to object to TD Banknorth's purchase of Hudson United when Mr. Ryan brought the idea to him. Hudson United has operated under a cease and desist order related to the money-laundering activities of a division it acquired three years ago. This May, the bank settled with Internal Revenue Service in an investigation dating back to 1998. The bank also has been a dud when it comes to growth.
But the move would solidify TD's position in an affluent region. And if Mr. Ryan is correct, Hudson United can be reinvigorated by introducing a new product line and injecting a more entrepreneurial culture.
In return for granting Mr. Ryan the freedom to fulfill his acquisition goals, Mr. Clark has tapped decades of shoulder rubbing the TD Banknorth executive has done with other regional banks. Mr. Clark says he had considered Hudson United when he was looking for a bank to acquire in New England. Mr. Ryan, though, is far more familiar with Hudson United, having talked with Kenneth Neilson, its CEO, for more than a decade about doing a deal. Finally, with TD's help, he had the capital to follow through.
While the story about Mr. Ryan and the Corvette is flashy, other Canadian banking operations in the United States also offer incentives. Both Bank of Montreal and Royal Bank of Canada retail employees are offered a range of things from cold hard cash to four-day holiday trips. Where their U.S. strategies have hit a snag, though, is in the inability to resist tinkering with their acquisitions, especially RBC which tried to micro-manage Centura.
WIth all of Mr. Clark's recent activity in the United States, other Canadian bankers are no doubt watching TD's progress closely. People who spoke with John Hunkin, the former Canadian Imperial Bank of Commerce chief executive, when he left the job at the end of June, say he has openly admired Mr. Clark's U.S. strategy.
"Hunkin has a lot of respect for what TD's trying to pull off," said one source who spoke with him. "He was quite intrigued by what they are doing. It was like he was saying, 'Gee, we should have done that.' "
